US federal court dents Shell Arctic oil ambition

​The ambition of Shell to start extracting oil in the Alaska shelf in Arctic waters this summer has faced another delay, as the US federal court claimed environmental risks of drilling had not been correctly assessed.

Opening up about 30 million acres of US Arctic waters to oil
exploration six years ago was illegal, according to a ruling by
the Ninth Circuit Court of Appeals.

The oil giant was brief in its comment on the court ruling,
saying it was just “reviewing the opinion,” the
Financial Times says. Shell has already ineffectually spent $5
billion on oil exploration in the Chukchi and Beauford Seas.

The decision of the court after six years of struggle by the
Wilderness Society and other groups against the sale of the
licenses was called a victory for wildlife conservation.

“The government has no business offering oil companies leases
in the Chukchi Sea. The area is home to iconic species such as
polar bear, bowhead whales and walrus and to a vibrant indigenous
subsistence culture. Drilling for oil puts at risk the region’s
wildlife and people, and it takes us off the path toward a clean
energy future,” the Guardian quotes Wilderness society
activists.

Greenpeace called the decision of the court not less than a
“massive blow to Shell’s Arctic ambitions”, and it was a baptism
of fire for the new Shell chief executive, who was appointed a
few weeks before the announcement.

“The court decision means the USA interior department has to
go back to the drawing board before it can reissue any new
license to Shell. Shell had already lost the case for Arctic
drilling in the court of public opinion – today [on Wednesday]
they have lost the case in a court of law as well,” John
Sauven, the executive director of Greenpeace UK said.

The exploration epic began in 2008, when the US government was
selling license blocks of the Chukchi. The bid for the
anticipated sale jumped to a record $2.66 billion in bids, $2.1
billion of which Shell paid.

It is estimated that the Arctic holds around 30 percent of the
world’s undiscovered natural gas and 13 percent of its unfound
oil. This amounts to around 400 billion barrels of oil equivalent
to 10 times the total oil and gas produced to date in the North
Sea. According to Shell, developing the Arctic could be essential
to securing energy supplies for the future.